Bank liquidators who helped the nation through the massive bank failures of the late 1980s and early 1990s are due millions in back pay from the Federal Deposit Insurance Corp., under a Federal Labor Relations Authority ruling.
Thousands of bank liquidators employed by the FDIC prior to May 1995 were paid for overtime at a rate below time-and-a-half, the standard rate for most employees under the Fair Labor Standards Act. Many agencies have incorrectly classified employees as exempt from the act because of unclear Office of Personnel Management regulations. Employees considered "supervisory," "professional" or "administrative" are exempt from receiving time-and-a-half for overtime work under the act.
An arbitrator ruled several years ago that the bank liquidators had been incorrectly classified as professional employees. The FDIC estimated that $3 million in "suffered or permitted" overtime back pay was due under the arbitrator's ruling. The National Treasury Employees Union appealed the arbitrator's decision that additional damages were not due. The Federal Labor Relations Authority agreed with the union, but remanded the case back to the arbitrator to decide on the time period covered by the ruling.
Once the arbitrator rules on the time period, former and current FDIC employees will be able to file claims for back pay.
The Fair Labor Standards Act classification problem is costing agencies tens of millions of dollars. A recent ruling in favor of the American Federation of Government Employees guaranteed Social Security Administration claims representatives an estimated $25 million in back pay. NTEU has waged back pay battles for IRS computer specialists and Farm Service Agency employees, among others.
Employees whose pay is affected by the Fair Labor Standards Act exemptions are typically at GS-10 or above, or the equivalent on other pay scales. A provision in U.S. Code Title 5 caps overtime pay at GS-10, Step 1 for exempt employees under the Fair Labor Standards Act.
Managers' associations are attempting to get Congress to lift the statutory overtime cap.
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